African gambling winners' taxes under pressure as enforcement gaps and revenue shortfalls mount

Across several African jurisdictions, taxes levied directly on gambling winnings are proving difficult to sustain. While governments have introduced such measures to boost revenue and address social harms, implementation has frequently been hampered by weak enforcement, industry resistance, and the risk of driving players toward unlicensed or offshore operators. A pattern is emerging: many countries have either repealed, reduced, or restructured these levies, while others are shifting to alternatives such as gross gaming revenue (GGR) or transaction-based taxes.

Ghana abandons its 10% withholding tax

Ghana provides the most decisive reversal. The Income Tax (Amendment) Act 2023 had imposed a 10% withholding tax on betting and lottery winnings alongside a 20% GGR tax on operators. But in early April 2025, President John Dramani Mahama signed Act 1129, repealing the winners' tax under a certificate of urgency. Finance minister-designate Cassiel Ato Forson had told his appointments committee in January 2025 that the tax “must be abolished” because it had failed, a pledge he repeated in his first budget speech.

Government spokesperson Felix Kwakye Ofosu argued the levy disproportionately hurt low-income bettors. “We find that there were many youth who were driven into that activity because of hardship,” he said, adding that taxing their “meagre winnings” when they lacked employment created unnecessary difficulty. The Ghana Revenue Authority had projected collections of around GH¢268.75 million ($23.3 million) from the betting tax package, but actual receipts before repeal were roughly GH¢80 million – a shortfall of nearly 70%. Industry stakeholders noted the winners' component was hard to administer and unevenly enforced, and its repeal was part of a broader rollback of politically sensitive taxes, including the E-Levy.

Uganda reinstates 15% levy with tighter compliance

Uganda, meanwhile, has reintroduced a 15% withholding tax on net winnings (payouts minus stake), effective from 1 July 2026 under the Income Tax (Amendment) Act 2026 and the Lotteries and Gaming (Amendment) Act 2026. The legislation also sets a unified 30% tax on GGR across betting and gaming, and gives operators until 30 June to clear qualifying arrears in return for interest and penalty waivers. Thereafter, monthly reporting obligations will apply.

Operators have raised practical difficulties. Bob Kabonero of the Uganda Gaming Operators Association told a meeting in April that land-based casinos face particular challenges. “But when you have 100 people playing at the same time, different games, there is cash on the tables, cashing out, cashing in using the same money, it is practically impossible to collect,” Kabonero said. The new regime tests whether compliance can be improved through tighter enforcement.

Zimbabwe hikes rate to 25% despite warnings

Zimbabwe has taken the steepest approach. A 10% withholding tax on winnings, originally projected to yield about $15 million annually, was credited with helping revenue slightly exceed its Q1 2025 target. However, from 1 January 2026, the rate jumped to 25% under the Finance Act, while the operators' tax on gross takings rose from 3% to 20%. Betting firms, casinos and lotteries must now withhold 25% of gross winnings and remit it to the Zimbabwe Revenue Authority under a strict monthly schedule.

Government ministers frame the increase as a revenue-mobilisation and harm-reduction tool. But opposition has been strong. The Portfolio Committee on Budget, Finance and Investment Promotion warned parliament in December 2025 that the tax could place a heavy burden on operators and gamblers, and cautioned that the sharp rise – combined with a higher cash withdrawal levy – risked pushing activity out of the formal system. The Confederation of Zimbabwe Retailers told the National Assembly in December 2024 that the betting tax “targets the poor” and should be scrapped. Analysts warned in November 2025 that a 25% rate would drive betting underground and ultimately reduce net revenue.

Kenya narrows winners' tax to lotteries only

Kenya illustrates how the cycle can swing back. After a 20% winners' withholding regime in 2018–2020 prompted operator exits and was partially rolled back, the Finance Act 2025 replaced winners' taxation with 5% levies on deposits into betting wallets and 5% on withdrawals. Then the Finance Act 2026 reintroduced a 20% tax on winnings, but only for lottery payouts and prize competitions. Finance Committee chair Kimani Ichung'wah explained in parliament that online gambling had been “effectively dealt with,” but that land-based casinos and lottery giveaways “were not being taxed” and the new levy “brings them into the ambit of taxation.” The wallet-based regime remains in place for other betting and gaming.

Lagos launches 5% levy tied to national ID

Nigeria's Lagos State has opted for a lighter touch. A public notice from the Lagos State Lotteries and Gaming Authority in February 2026 introduced a 5% withholding tax on net winnings for all Lagos-licensed betting and gaming platforms. Operators must deduct the charge at payout and remit it to the Lagos State Internal Revenue Service. Bettors must provide their National Identification Number, linking winnings and withheld amounts to their income-tax profiles and treating the deduction as a tax credit rather than a standalone fee.

For most regulated-market users, the 5% hit is likely to be absorbed as a cost of playing on licensed platforms that offer better payout reliability and dispute resolution. The bigger question is whether stricter enforcement and identity-linked reporting will push price-sensitive or high-frequency bettors toward unlicensed operators over time. Lagos is effectively testing whether a modest winners' tax combined with strong KYC can raise revenue and improve transparency without triggering the exodus seen under higher-rate regimes.

South Africa opts for operator-side tax instead

South Africa, the continent's largest regulated gambling market, is moving decisively away from taxing players. A November 2025 discussion paper from the National Treasury proposed a national 20% tax on GGR from online betting and interactive gambling, to be added on top of existing provincial GGR taxes of 6–9%, bringing the total to 26–29%. The treasury aims to reflect the social costs of rapid online gambling growth and raise about R10 billion a year in additional revenue.

Supporters argue that a national GGR levy is easier to administer and enforce than winners' taxes, since it targets operator revenue captured through routine filings and audits rather than individual payouts. The public-comment phase closed on 27 February 2026, and the proposal marks a clear strategic turn: tax the house at a central level instead of taxing players at the point of payout.

Why winners' taxes remain fragile

Across the continent, winners' taxes have repeatedly proved structurally fragile. Revenue has often fallen short of projections, enforcement has been uneven, and concerns about migration to unlicensed or offshore channels have driven reversals or redesigns. Ghana's 10% tax was repealed after a 70% revenue shortfall. Zimbabwe's leap from 10% to 25% faces sustained opposition and tests the limits of formal-market participation. Uganda and Kenya have repeatedly revised the balance between winners' taxes and operator-side taxation, while South Africa bypasses the issue altogether with a national GGR model.

Lower-rate regimes like Lagos's 5% levy may generate less behavioural disruption, but governments still confront enforcement and competition constraints. For iGaming operators eyeing African expansion, the recent record suggests that winners' taxes are politically and administratively difficult to sustain long-term. More durable revenue models appear to lie in GGR-based levies and transaction taxes on deposits and withdrawals.